How To Position Your Business For The CBN Cashless Policy
Financial analysts and economists have been voicing out their concerns regarding the CBN cashless policy introduced in Nigeria. Although the House of Representatives has asked the Central Bank of Nigeria to suspend charges on deposits, we know that the sooner or later, the cashless policy will take effect with full swing. The question to ask as an entrepreneur in Nigeria is, how does this affect me and business? How can you position your business so that it will not be negatively affected?
Also read: How to scale your startup in Nigeria
You need to start now to identify ways to position your business for the CBN cashless policy. As people are busy saying that it is wrong or right, your duty should be to make hay while the sun shines. You need to start drafting measures that will ensure the survival of your business as we await the final judgment. If there is a time to be decisive about your business, now is the time.
The purpose article of this article is to provide you with the vital and essential information to make an informed decision. Your job as an entrepreneur is not only to satisfy your customers, you need to understand government policies at every point in time. Your understanding of these government policies will help you make decisions in line with these policies. As an entrepreneur, you need to be well informed on what the government is doing that may directly or indirectly affect your business. Take chilled water and relax as I take you through this one step at a time.
The CBN Cashless Policy: What It Entails
A memo released on September 17, 2019, by the CBN informed Nigerians of a new policy on cash-based transactions. The memo stipulates that a cash handling charge on daily cash withdrawals that exceed N500,000 for Individuals and N3,000,000 for corporate bodies. According to the memo, the bank will charge 3% and 2% on withdrawals and lodgments respectively for individuals. For corporate bodies, banks will charge 5% and 3% for withdrawals and lodgments respectively. What it implies is that if you go to your bank to withdraw or deposit N600,000; the bank will charge you on the N100, 000 which is in excess of the N500,000. Same also applies to corporate bodies.
The CBN said that the policy aims to reduce and not eliminate physical cash circulating in the economy. It will also encourage electronic-based transaction payments for goods, services, transfers, etc. The information available on the official website of CBN stated that the policy was introduced for a number of key reasons, including the following:
- To enhance the development and modernization of Nigeria’s payment system in line with the vision 2020 goal of being amongst the top 20 economies.
- To reduce the high cost of banking services including the cost of credit, and then promote financial inclusion by providing more efficient options for the transaction.
- To drive and improve the effectiveness of monetary policy in managing inflation and driving economic growth.
Impact Of Cashless Policy On Businesses And How You Can Annul The Effect
Like I stated earlier in the course of this article, the bank charges are suspended. You need to remember that it is “suspended” and not canceled, meaning that it is just a matter of time before it takes full effect. Financial analysts have opined that the CBN cashless policy will have adverse effects on small and medium scale businesses in Nigeria, especially in the short term. Maybe it will improve in the long run, maybe it won’t. One thing is certain, small and medium businesses will suffer in the short term.
So, how can you position your business for the CBN cashless policy? There are a few things you need to implement as we await the launch of this policy. They include the following:
Have a good knowledge of the ICT
While we wait for the full execution of the policy, it will be in your interest as an entrepreneur or business owner to get the necessary idea about ICT. You need to educate your customers on the use of Point of Sales (PoS) business solution and e-transactions. It will be easier when you educate your customers on these things to enable them to perform their transactions without a hitch once the policy takes full effect.
You will need to have a good knowledge of ICT to reduce the chances of getting defrauded during the course of your business transaction.
Make use of a reliable network provider
With e-transaction being the way to go, you will need a reliable network for your business transactions. You need to identify the network provider with the best internet service in your business location. If you are not a subscriber, then now is the time to switch camp for the sake of your business. You wouldn’t want a situation where your customer will be at loggerheads with you as a result of slow confirmation of a transaction.
It is high time you started thinking about positioning your business to thrive and limit the time spent on bemoaning the impact of the policy. You need to start strategizing and identifying ways to better position your business as an entrepreneur in Nigeria. Now is not the time to complain, rather it is time for decisive actions. You don’t want to be found wanting when it will eventually take effect.
For your contributions and comments about the CBN cashless policy, kindly make use of the space provided below.